Posts Tagged ‘entitlement programs’

Many who are successful attribute it to their ability and hard work. That is often true, but most Americans also owe their success to the opportunities, education, and resources that our country provides us – and also to good fortune. Our country provides safety nets so that no matter how fortunate or unfortunate a person is in their life, they will receive healthcare and not be destitute in old age. Those safety nets are often called “entitlements programs “, and that is true. We all pay to support those programs through taxes and contributions and we are all entitled to the benefits. Those who do not need the safety nets, or who do not wish to pay their share, often want to reform them in ways consistent with their self-interest.

In the Tulsa World article, “Social Security, health care reform needed”, John Brock lays out a plan to remove government from managing retirement funds, Social Security, workers compensation, and health care. Mr. Brock says “the solution to our government’s problems is to empower people to manage their own affairs.” Though empowering people sounds good, the article is based upon questionable assumptions.

The first assumption is “that the government is controlling our lives more and more.” That is a common theme in politics these days, but hardly true. We democratically elect our representatives and leaders, and we have much more control over our government than probably any other country in the world.

The second is “having a government manage these necessities is risky. “ He points out that Greece, Spain, and a number of state and local governments are having financial problems. That’s true, but is not necessarily because of their entitlement programs. Many of the problems stem from the fact that the wealthy have found ways to reduce or avoid paying taxes. He goes on: “For decades governments have been taking on future obligations without making provisions to cover the costs.” However, in many cases, provisions were made to cover the cost but later tax cuts reduced the expected revenues. Then, there are many who do not think that teachers, policeman, fireman, serviceman, and other government employees are worth the retirement funds provided them.

The next assumption is that Social Security “will default in the near future”. The Social Security trust fund is adequate to pay benefits through 2023, and raising the FICA cap could extend it through 2080. The Social Security Trust Fund is invested in US Treasury bonds, which earn interest and are as solid as theUS government. We are lucky that Social Security was not privatized in 2006, as the recession would have wiped out much of our retirement savings.

The final assumption is that we all have the time and the expertise necessary to deal with the work that Mr. Brock’s plan would require. Those who are wealthy and lucky would certainly profit from managing their own accounts, but those who lack expertise or are not lucky may end up with no medical care provisions or retirement funds.

The idea of insurance is to spread risk and the larger the population, the less expensive and more reliable insurance is. Spreading the risk over every citizen increases the efficiency and provides a safety net for everyone. We are lucky to live in a country where we enjoy the benefits that self governance and cooperation affords us. We should resist efforts to remove programs which provide our safety nets from government management, particularly if it makes them less reliable or managed by those who desire to profit from them.

Congressman John Sullivan (R-OK) held a town hall meeting in Tulsa, Oklahoma where he discussed the budget, Social Security, energy issues, EPA regulations, jobs, and the XL pipeline. The article gives Congressman Sullivan’s positions, comments and questions asked by the audience, and compares the authors views to Congressman Sullivan’s.

Congressman John Sullivan conducted two town hall meetings in Tulsa on January 26, 2012. The first was held at Tulsa Community College’s Metro Campus where a number of his constituents challenged Sullivan’s views. That meeting was reported by the Tulsa World’s Randy Krehbeil in, “Sullivan town hall-goers applaud Obama speech”. The afternoon meeting, which was held at the Hardesty Library in South Tulsa, had a much more partisan crowd. Congressman Sullivan’s opening remarks were much like those at his Sand Springs meeting last November. At the Hardesty meeting, he did not give people the opportunity to applaud Obama’s speech, he just criticized it. When people tried to point out the errors in his criticisms, they were interrupted by people shouting,” Ask a question”. Sullivan was there to hear what his constituents thought, but apparently his supporters did not want to hear anything good about the President.

Gridlock: Congressman Sullivan likened Obama to a football coach who gives a great locker room talk but doesn’t win. It was a bad analogy as the coach cannot win without cooperation from the players, and many players in Congress seem more interested in beating the coach than winning for the country. Every winning team needs a reasonable budget, but many Congressmen have insisted on cutting taxes and 206 legislators, Sullivan included, have signed Norquist’s pledge not to raise taxes. He blamed the President and the Democrats in the Senate for the gridlock, saying that the house had sent the Senate 26 bills that were not enacted. However, most of those bills contained a “poison pill”. For instance, H.R. 3630, the badly needed Middle Class Tax Relief and Jobs Creation Act of 2011, also had a provision to delay implementation of the Medicare Sustainable Growth Rate, to hinder the EPA, and to force approval of the Keystone XL pipeline. It is hardly fair to blame the Senate when they are not sent clean bills.

Energy : Congressman Sullivan said that we needed the XL pipeline to create jobs and claimed that it would create hundreds of thousands of jobs directly and indirectly – and that the only problem was just a few miles through Nebraska wetlands. The problems are actually much greater. They involve destruction of the boreal forests in Canada, pollution of Canadian rivers, acquiring the water and energy needed to process tar sands, and the carbon emissions the project would cause. Then, it is still not clear how many jobs it will actually create, who will profit from the project, and whether much of the oil will be shipped to foreign countries, possibly without being taxed as some of the refineries are in a tax-free zone.

The Congressman said he has introduced legislation encouraging the development of natural gas as a fuel. He pointed out that natural gas provides about three times as much energy and costs much less than gasoline. Natural gas is plentiful in Oklahoma and developing the infrastructure to use it as a fuel would help Oklahoma’s economy and reduce our dependence on foreign oil. That is about the only positive contribution that Congressman Sullivan has made on environmental issues. Using natural gas would also significantly decrease our carbon emissions – but the Congressman did not mention that as he does not accept the scientific research on climate change. His supporters claim to be conservatives, but it is hard to imagine how they could support someone who is not also a conservationist. Congressman Sullivan scored a 9% on the League of Conservation Voters scorecard (page 52).

Audience Questions: The wife of a veteran told of the problems her husband had getting help from the Veterans Administration and asked if Sullivan could help. Congressman Sullivan said he would see what he could do. I hope he can help that veteran, but it is not likely that all the veterans needing help will get it if we cut the budget as Congressman Sullivan wanted. The veteran was certainly a good man, and when pressed to speak, he said that it would really help if people would recycle more. He pointed out that we throw away a lot of things that are still useful and that by recycling them we could create a lot of jobs and save our resources.

Another woman complained that the EPA’s rules about Freon were making it difficult to get the refrigerant needed for their air-conditioning business. Congressman Sullivan took it as an opportunity to criticize the EPA and the Obama administration, apparently unaware that those rules had been signed into law by President Reagan.

A CPA in the audience brought it to the Congressman’s attention that the low interest rates were hurting people who had their nest egg in savings accounts and CDs. He also pointed out that the mandatory IRA withdrawals required at age 70 1/2 are making people withdraw the money that they may need to save for later in life. The Congressman agreed that some changes need to be made there.

When the Congressman was asked about who he would like to see as the Republican presidential candidate, he said he would support whoever could beat President Obama. A member of the audience tried to point out that there were other things more important than beating Obama, and that the President and his wife were good role models and examples of family values. She was almost drowned out by disagreements from the audience.

Entitlements: There was a time when Republicans were fiscal and environmental conservatives. Congressman Sullivan said he wanted to cut what he calls “entitlement programs”, but one of his own supporters set him straight by pointing out that those were “earned benefits”, not entitlements. I want my children and grandchildren have the same benefits I did, and I want them to have clean air to breathe and clean water to drink and a beautiful Earth to enjoy. They are entitled to that.